Food Industry Advances Healthier Solutions

01 Aug, 2013

By Rachel Duran

Initiatives to add value create new opportunities.

In a quest to develop value-added products to ensure the sustainability of the dairy industry and family farms, and after many years of research, Omega Valley Farmers LLC in Clark County, Wis., is processing foods with higher levels of omega-3s.

Clark County is ranked as either the country’s No. 1 or No. 2 milk producing county, which creates a critical mass of food production opportunities in the county and in surrounding communities.

Working with farm-raised ingredients, the Omega Valley Farms’ feed process is all natural. The Total Meal Replacement product is a patented process that opens up more of the omega-3 values in the seeds so that the animals’ bodies are able to absorb them.

The results have been verified. The company’s cheeses feature 390 plus mg of natural omega-3s per serving; other cheeses contain 35 mg to 40 mg of natural omega-3s per serving.

Omega Family Farmers offers 13 varieties of its omega-3 cheeses, and will offer omega-3 ground beef patties. Work continues on the development of pork products and bakery products with higher levels of omega-3s.

Donohoe continues to integrate new concepts in collaboration with up to 20 research entities to forward that next level of animal health promotion. The efforts are in the areas of organ structure modeling and food safety.

Schultz says there is a continued negative perception of the health impact of our current food systems. “This [effort] was a natural fit for us,” he says. “We feed the cows, so how can we be part of solving these problems? We feel we can be part of that solution with our natural omega-3 foods.”

Schultz says Clark County’s dairy industry coupled with nearby meat processors really does put the food products to the “world right here in our backyard from the farm. This in turn should provide a base for other businesses to come to this area for food product development.”

Another large dairy producing area is southern Idaho, an area where economic development leaders were exploring ways to add value to and sustain their agriculture assets, targeting wet industries such as vegetable production and dairy production. “We have three communities that can accommodate wet industry: Twin Falls, Burley and Rupert,” says Jan Rogers, executive director, Southern Idaho Economic Development Organization.

The region’s assets were attractive to Chobani Greek Yogurt, which selected Twin Falls as the site for a large manufacturing plant, which began production in December 2012. As the company ramps up operations it is currently using 2 million to 3 million gallons of milk a day. “The company has more than 650 full-time employees, and they were originally talking about hiring 350 people,” Rogers says.

Rogers notes the presence of Chobani has drawn the attention of companies that would add value to the Chobani product. “Folks at Chobani indicate they fully expect other value-added companies will consider the area,” she says.

The “Chobani effect” as Rogers calls it, is also supporting the expansions of supplier industries. Boise Paper Co., located in 35 miles away in Burley, is expanding to meet Chobani’s requirement for boxes.

With growth come challenges. The Chobani project, coupled with expansions of other businesses, finds the southern Idaho region is approaching the wall in regard to waste water capacity. “This May, Twin Falls went to bond to double the capacity of its current system for future growth,” Rogers says. “It passed by more than 70 percent, which is an affirmation of the community’s willingness to grow and put the proper infrastructure in place.”

What’s more, Burley and Rupert have permits in place to support future operations in regard to the addition of milking cows. “We will continue to attract dairy processors to the region,” Rogers says. “We have shovel- ready industrial parks in Twin Falls, Jerome, and in the Burley-Rupert area. We are well positioned to continue the momentum we have seen.”

Full Spectrum

Access to support systems and supply chains are vital to industries both large and small. In northern Kentucky, a part of the Cincinnati MSA, food processing companies are able to access many resources. The area, which includes the counties of Boone, Kenton and Campbell, has a history in manufacturing activities. Food companies will find service providers in the area that support the corporate headquarters for Procter and Gamble and the Kroger Co.

In regard to expansion activity, food service manufacturer and packager, Lyons Magnus Inc., announced in the spring it would add 50 jobs and invest $5 million in its Kentucky operations. In February, WestPack announced it would make a $4.9 million investment to build a bottle decorating and packaging facility in Covington, creating 63 jobs.

Also in February, Newly Weds Foods purchased an existing 326,000-square-foot facility at the Circleport Business Park in Erlanger, investing $57 million and creating 115 jobs. The location will be a regional plant producing bread crumbs and other products.

Moving up to the Iowa City, Iowa region, there is a long history of large scale ag processing companies, such as ADM, Cargill, Quaker Oats and West Liberty Foods. However, in the past couple of years “we have seen the growth of smaller producers who are starting to reach commercial scale,” says Mark Nolte, president, Iowa City Area Development Group. “These companies run the gamut but they are mostly focused on natural and organic.”

These companies include Breads From Anna, which produces gluten-free bread mixes. Another company, Frontier Natural Foods Co-op, is a compounder of natural and organic spices.

Nolte says these growing companies are able to leverage the distribution channels of resources such as United Natural Foods Inc. and National Cooperative Grocers Association. UNF, the largest distributor of natural and organic products, has a distribution center in the community, and NCGA is headquartered in Iowa City.

In addition, due to the presence in the region of one of Procter and Gamble’s largest facilities, a number of supply chain companies are in the area supplying bottling, packaging and marketing services.

Moving north to Caledon, Ont., the community offers many advantages that have played a significant role in attracting multinational food companies such as Mars, Sardo Foods and the worldwide center of operations for canola research for Pioneer Hi-Bred. The community is also part of the Greater Toronto Area (GTA), which is home to one of North America’s largest food processing clusters, registering annual sales of more than $32 billion.

“We are located in the plains with significant ag land that is farmed and is available to be farmed, so as far as the value chain we can provide this at several different levels,” says Norm Lingard, manager of economic development, town of Caledon.

Certified Shovel-Ready

Caledon is one of the largest municipalities in the GTA, and features one of the largest inventories of shovel-ready industrial land. Its development fees and municipal taxes are also among the lowest in the GTA.

In addition, Caledon’s location offers access to more than 200 agricultural commodities and excellent access to markets and distribution systems.

In northern Kentucky, real estate solutions are a hallmark of the region. “We have a strong national and regional development community,” says Karen Finan, senior vice president, Northern Kentucky Tri-County Economic Development Corp. “Because of the presence of our international airport, many of these developers came in years ago. They have grown their real estate holdings through several master-planned parks.”

Finan says northern Kentucky’s building inventory was important to Newly Weds Foods. The company was in the market for a couple of years for this expansion, researching multiple locations. The northern Kentucky region was out of the running for a while; however, officials stayed in front of the company, and when a building became available in the Circleport Business Park, the company selected northern Kentucky for the project.

Over in Columbus County, N.C., the agriculture industry is the region’s leading sector. “We are a viable location, between three other counties that are also large ag producers, for a food processing plant to locate,” says Gary Lanier, director, Columbus County Economic Development Commission.

The community’s Southeast Regional Park has been certified as ideal for food processing and beverage companies. The designation came from Primus Builders and Garner Economics, which certifies the park has met the rigorous criteria companies consider during the site selection process. The park is also certified through the North Carolina Department of Commerce.

Major siting considerations for food processors include access to an abundance of water. “In talking with our public works director, our park is located at the intersection of three aquifers,” Lanier says.

Columbus County also has the workforce to support food processors and the agribusiness industry. The Columbus Career & College Academy is part of the county’s school system. Areas of study include culinary science and food processing, where students are taught food safety; how to work with machinery used in processing; restaurant management; how to be chef, and how to be a food photographer, writer or food stylist.

“Students can start at the academy in eighth grade and focus on the culinary arts or food processing and go on to the community college,” Lanier says. “The program allows a student who continues at the college to earn an associate’s degree after one year. We are graduating young people that are ready to go to work in the food processing industry.”

In addition, Columbus County is in proximity to the labor pool in Myrtle Beach, S.C., which is located 20 miles away, and is home to more than 1,000 restaurants, where a lot of work is seasonal. Lanier says these seasonal workers might find the opportunity to work steady hours and receive a benefit package by working at a food processing facility locating in his area to be an alternative career path.

In northern Kentucky, manufacturers and educators collaborate in regard to training programs. Gateway Community College’s advanced manufacturing center is driven by the area’s manufacturers, including food manufacturers. “If there is a specific need or skills deficit they are able to feed these needs to the leaders at Gateway and the curriculum reflects that,” Finan says.

In Iowa City, at Kirkwood College, rated one of the nation’s top community colleges, “students are trained in food handling and safety, and there are culinary experts who can do testing and sampling,” Nolte says.

The school also has a large truck driving program, which is important to the area’s processors. (Heartland Express and CRST Trucking are both headquartered in the region.)

Iowa State University has statewide extensions to assist producers with food safety, licensing and labeling. The University of Iowa system offers assistance with product development, business development and legal aspects.

In Caledon, Lingard says the Pioneer Hi-Bred canola research center creates research synergies in the region. “The company has close ties to our local universities, bringing forward methods, innovation and collaboration, and technologies that are state-of-the-art,” he says.

Finding synergies with higher education partners, the availability of land and facilities, and access to a complete supply chain are attractive to food processing companies.

With these assets in place, companies can focus on making a difference in supporting sustainable agriculture on the family farm, and producing healthier foods for consumers, Schultz notes.

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Sustainability Equals Opportunity for Family Farms

The ultimate goal for Jesse LaFlamme of Pete & Gerry’s Organics based in Monroe, N.H., is how many opportunities they can provide for small family farms. In addition to producing cage free organic and natural eggs, the company is committed to finding methods for sustainable organic farming, reaching 100 percent sustainability.

The company found itself being squeezed out of the egg producing business by large commodity egg producers. To create opportunities, LaFlamme’s parents began producing eggs that were not produced with vegetarian feed, and thereafter, organic eggs, says LaFlamme, CEO, Pete & Gerry’s Organics. He is a fourth generation family farmer.

Today, the company’s combined acreage consists of 250 acres. On one farm there are nine barns, with 19,000 hens per barn. By comparison, caged barns can hold up to 250,000 hens.

Pete & Gerry’s Organics has established a partnership with 60 family farms, which together package more than 1 million eggs a day, seven days a week. “The average size of our farms is 16,000 hens,” LaFlamme notes. “Most are single barns, some might have two barns. It provides a living for a family or is a supplement to other farming activities.”

LaFlamme says he is establishing a vehicle to help finance farmers that do not have equity. “We are working as a nonprofit or low-profit entity essentially to provide equity so farmers can get their start, especially younger farmers,” he says.

The company is on its way to meeting its sustainability goals, and is b-corporation certified. It has installed higher energy efficient lighting equipment, and is undertaking waste conservation efforts. The company also participated in a project of the Sustainable Food Lab, which analyzed the carbon footprint of the entire egg program, from how much carbon is used to get grain to the hens, and the eggs to the market, to learn where improvements could be made.

Up next is experimenting with smaller flocks through the use of mobile systems, modeled after European methods. “These mobile houses would be part time or part of a larger agricultural system,” LaFlamme says. “And in order to make them work, the eggs need to come at a premium. In the warmer months, hens can graze in pastures extensively, which would be one of the attributes to making a premium product.”